Colorado Sales Tax Rate & Rules (2026)

Last updated: 2026-03-27

What is the sales tax rate in Colorado?

What is taxable in Colorado?

How do you register to collect sales tax in Colorado?

What is the economic nexus threshold for Colorado?

How to register for sales tax in Colorado

Before you can collect sales tax, you need to register with the Colorado Department of Revenue. Here is the step-by-step process.

1. Apply for a Colorado Sales Tax License online through the Colorado Department of Revenue at mybiz.colorado.gov
2. The state license is free, but many home-rule cities require separate registration and may charge fees
3. Provide your FEIN or SSN, business entity type, and location details
4. Colorado has over 70 home-rule cities that administer their own sales tax — you may need to register separately with each one
5. Consider using the SUTS (Sales & Use Tax System) portal to simplify multi-jurisdiction filing

How to collect sales tax in Colorado

Once registered, you are responsible for charging the correct amount of sales tax on every taxable transaction. Here is how the collection process works in Colorado.

1. Determine taxability of each product — Colorado taxes most tangible goods but exempts groceries at the state level
2. Calculate the correct combined rate based on the delivery destination — Colorado is a destination-based state for state-administered taxes
3. Be aware that home-rule cities may have different taxability rules and rates than the state
4. Charge the correct rate at the point of sale and separately itemize sales tax on invoices
5. Accept Colorado resale certificates (Form DR 0563) from qualifying buyers
6. Keep detailed records of sales by jurisdiction for at least 3 years

How to file and remit sales tax in Colorado

Filing your sales tax return on time is critical to avoid penalties. Colorado requires electronic filing for most businesses.

1. File state returns through Revenue Online at colorado.gov/revenueonline
2. State returns are due on the 20th of the month following the filing period
3. File home-rule city returns separately through each city's portal, or use the SUTS system if the city participates
4. Report gross sales, exempt sales, and net taxable sales for each jurisdiction
5. Pay electronically — Colorado requires electronic filing and payment for most businesses
6. Retain all records for at least 3 years

What is exempt from Colorado sales tax?

Not everything is subject to sales tax. Colorado provides exemptions for certain products, buyers, and uses. Always verify the specific exemption requirements with the Colorado Department of Revenue.

• •Sales for resale with a valid Colorado resale certificate (Form DR 0563)
• •Groceries (food for home consumption) at the state level — some cities still tax food
• •Prescription drugs and medical devices
• •Manufacturing and processing equipment (various exemptions)
• •Agricultural equipment, livestock feed, seed, and fertilizer
• •Sales to federal, state, and local governments
• •Charitable organizations with a valid exemption certificate

What are the highest combined sales tax rates in Colorado?

Because Colorado allows local jurisdictions to add their own sales taxes on top of the state rate, combined rates vary by location. Here are some of the highest combined rates in major Colorado cities.

What is use tax in Colorado?

Colorado use tax applies to taxable goods purchased from out-of-state vendors who do not collect Colorado sales tax. The use tax rate equals the sales tax rate for your location. Businesses must self-report use tax on their regular sales tax return. Note that home-rule cities may also impose use tax with their own reporting requirements. Common triggers include online purchases, out-of-state equipment purchases, and supplies from non-collecting vendors.

Does Colorado have marketplace facilitator rules?

Colorado requires marketplace facilitators with $100,000 or more in Colorado sales to collect and remit state sales tax on behalf of third-party sellers. This includes platforms like Amazon, eBay, Etsy, and others. Some home-rule cities have adopted their own marketplace facilitator ordinances. Sellers should verify whether their marketplace is collecting local taxes in addition to the state tax.

What are the penalties for sales tax non-compliance in Colorado?

Colorado imposes a penalty of 10% on late-filed returns, plus an additional 0.5% per month (up to 18%). Interest accrues at the prime rate plus 3%. Home-rule cities have their own penalty structures, which can add to the total liability. Willful failure to collect or remit sales tax is a criminal offense in Colorado, punishable by fines and imprisonment.

This is general information, not legal or tax advice. Tax rules change frequently — always verify with the official state agency. Sources: Colorado Department of Revenue.